Hospital price transparency law unlikely to result in competitive prices

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Billings Clinic, foreground, and St. Vincent Healthcare, center, are seen in a 2015 photo. 


A Trump-era law meant to drive down health care costs through increased price transparency is proving ineffective in creating competition between hospitals.

The Centers for Medicare and Medicaid Services (CMS) Hospital Price Transparency rule aims to lift the veil over hidden health care prices by requiring hospitals to publish the price of common health care services. The prices must be publicly available in a “machine readable” spreadsheet, referred to as a chargemaster, of gross charges, discounted rates for those without insurance and payer specific negotiated rates.

The rule also requires hospitals have a consumer-friendly cost estimation tool of standard charges for at least 300 “shoppable” services, or services that can be scheduled in advance such as a knee replacement or a colonoscopy. CMS established 70 required procedures, but the remainder are left up to hospitals to decide its most common procedures.

The law is designed to make shopping for services possible for consumers,

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